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Warren Buffett doesn’t like gold. In this year’s annual letter to
Berkshire Hathaway shareholders, Warren Buffett scorned gold as
an asset that is “forever unproductive.”

And he’s right about that…

But investors don’t buy gold because they hope it will produce
something. They buy gold because they know that no one can
produce it. Therefore, the more that folks distrust their
national currency, the more they put their trust in the ultimate
currency: gold.

The gold price has increased for 11 consecutive years — a time
frame during which, coincidentally, it has trounced the
investment return of Berkshire Hathaway. Why? Because a new era
of monetary destruction is unfolding throughout the Western
world. That’s why a growing number of investors are devoting a
growing percentage of their investment portfolios to gold and
other hard assets.

Nevertheless, the American community of gold lovers remains
miniscule by comparison to the community of Berkshire Hathaway
lovers or Apple lovers. In this sense, Buffett is thoroughly
average — he hates gold just as much as the next guy.

Interestingly, however, Buffett is one of the very few
billionaires on the planet who scorns gold. In fact, several
billionaire investors have disclosed recently that they are
taking the other side of the Buffett “sell” on gold.

George Soros, the billionaire founder of Soros Fund Management
LLC, raised his stake in the SPDR Gold Trust (GLD) to 85,450
shares from 48,350 during the last three months of 2011. The
billionaire hedge fund manager John Paulson also holds a large
stake in GLD.

“Paulson made his way into the financial history books thanks to
what many now call the ‘greatest trade ever,’” Money
Morning reports:

“Paulson & Co. shorted the subprime mortgage market before
the collapse, banking a $15 billion gain. So when Paulson went
big again by buying gold in 2009 and 2010, investors took notice…
In fact, Paulson’s holdings in the SPDR Gold Trust (GLD) make his
firm the biggest stakeholder in this ETF, with a position
currently valued at $2.9 billion.”

The billionaire “Bond King” is also singing gold’s praises these
days. Bill Gross, the guy who founded PIMCO, the $1.3 trillion
financial firm dedicated to managing bond portfolios, remarked
last month, “Recent central bank behavior, including that of the
US Fed… may as well induce inflationary distortions that give a
rise to commodities and gold as store of value alternatives when
there is little value left in paper.”

One final admirer of gold is neither a hedge fund manager nor a
billionaire. This admirer is a trillionaire! Literally.

In 2011, China became the No. 1 importer of gold. China was
already the world’s leading gold producer. The Asian juggernaut
also reduced its holdings of US government securities last year
for the first time since the Treasury began keeping the data in
2001. As of Dec. 31, China held $1.15 trillion in Treasuries,
down from $1.16 trillion at the end of 2010.

China is not only the biggest importer of gold, it is also the
biggest miner of the precious metal. According to the World Gold
Council, China produces nearly 50% more gold (about 300 tons per
year) than the second-place country… Australia. And not a single
ounce of that newly mined gold leaves the country. By law, the
Chinese government buys every ounce of gold that surfaces from a
Chinese mine shaft… no matter what.

Clearly, the Chinese are taking the “long view” when it comes to
gold accumulation. They believe they can trust gold more than US
Treasuries.

Maybe Soros, Paulson, Gross and the Chinese are all crazy to buy
gold. Or maybe Buffett is crazy not to. Place your bets!